This fact was confirmed Tuesday with the latest Case-Shiller numbers, which showed that home prices fell by 0.5% from June to July. While home prices rose 6.7% from a year ago, long gone are the days of double-digit price increases and drum-tight inventory.

And now that real estate prices have recovered to levels consistent with the pre-bubble years, it's probably a good thing that home price appreciation has settled down. The only problem is that while valuations are back at a level that history suggests they should be, this stabilization hasn’t led to a broader recovery in the construction industry, which has historically powered the country to above-average growth following recessions. In the years following recessions in the early 1980s and 1990s, investment in housing rose, from contributing on average 3 basis points to GDP all the way to 50 points. The fact that this isn’t happening may explain why the U.S. has experienced such a sluggish economic recovery.

According to Jed Kolko, chief economist at Trulia, all of this can be laid at the feet of the Millennial generation; or, to be more specific, the fact that members of that generation can't find jobs. In a report released on Wednesday, Kolko points out that while home prices, existing home sales, and the foreclosure rate have more or less recovered to their pre-bubble norms, two measures--new home construction and youth unemployment--show where the recovery has come up short.

As Kolko writes, these measures "connect the housing market to the job market," because youth employment creates demand for housing, and demand for housing creates good paying, middle-class jobs that can help further spur economic and wage growth.

Take a look at the unemployment rate for workers ages 25-34--the older half of the Millennial generation:

As you can see, the unemployment rate for this group is well above pre-recession norms. In fact, the unemployment rate for this group is higher than what it was during the worst point of the recession during the early 2000s. That's a problem for the housing market because in normal times, first-time homebuyers should be members of this age group. As Kolko writes,"As the housing recovery continues, it depends less on the … tendency of housing prices to right themselves, and much more on such fundamentals as jobs, income growth, and household formation."

Housing prices have recovered, but no amount of home price appreciation can solve the fact that young people don’t have jobs, and the ones they do have aren’t paying well enough for them to form households of their own.

]]>http://fortune.com/2014/10/01/housing-recovery-economy/feed/0New Home Sales Plunge 11.8%christopherrmatthewsmillenial unemployment rateHow to help America’s most vulnerable jobseekers: Undereducated youthhttp://fortune.com/2014/09/24/youth-unemployment/
http://fortune.com/2014/09/24/youth-unemployment/#commentsWed, 24 Sep 2014 18:43:39 +0000http://fortune.com/?p=798461]]>A few folks over at the Clinton Global Initiative annual meeting have cooked up a plan to solve the problem of millions of young Americans who lack steady jobs or a college education: match them with corporations in need of entry-level talent.

The Ad Council, which produces public service advertisements, along with a coalition of mentoring and workplace training non-profits, rolled out a campaign called Grads of Life at the meeting Tuesday to help corporations fill the 4 million currently vacant positions in the U.S. with what the campaign calls "opportunity youths," 16 to 24-year olds who have not followed a traditional education path. There are an estimated 6 million “opportunity youths” in the U.S.

The campaign launched a series of public service announcements and an online platform aimed at introducing corporate America to this potential workforce. The platform also offers companies access to job preparation-related non-profits like Year Up, the Employment Pathways Project, MENTOR: The National Mentoring Partnership, and Opportunity Nation.

"Two-hundred and fifty of the Fortune 1000 companies are having trouble finding entry level talent," says Shawn Bohen, national director for strategic growth and impact for Year Up, an organization that provides workplace training and internships to urban youth. When it comes to hiring young Americans, corporations have been derailed by negative perceptions of Millennials and a reliance on hiring processes that are tailored toward applicants with four-year degrees, Bohen says. "Meanwhile the number of people not in the economy is growing on our watch. So we’ve gotten into this campaign to raise awareness on the employers' side about the success other employers are having [hiring opportunity youth]," she said.

Young Americans are among those who suffered most from the economic downturn. In the recession’s wake, they have endured unemployment at a rate nearly twice as high as the nationwide average. Individuals age 16-24 experienced 18.1% unemployment in July 2011. The country as a whole, meanwhile, reported 9% joblessness at that time. In July 2014, youth unemployment had dropped to 14.3%, but that was still more than double the national rate of 6.2%. Those figures are especially alarming since research shows that workers who are unemployed as young adults earn lower wages for many years after their jobless stints. The Center for American Progress estimates that young Americans who were stuck in long-term unemployment during the recession will miss out on a collective $20 billion in potential earnings over the next 10 years.

The Grads of Life campaign specifically seeks to help young Americans who have dropped out of high school or college. Many of these Americans struggle to build an economic foundation for adult independence, putting a burden not just on the individual, but on taxpayers and society as a whole. Every year, each one of these opportunity youths--through lost taxes and higher government spending, mainly on the criminal justice system--costs taxes payers an estimated $13,890 a piece. Multiply that times 6 million and you have an $83 billion problem.

Nonprofits like Year Up have long been trying to address this issue. The 14-year old Boston-based organization uses community-based organizations, high schools, and religious organizations to identify young adults with high school diplomas or GEDs who are fit for its one-year program, which combines six months of workplace training in a classroom setting with six months of a professional internship at companies like AOL, Google, Facebook, LinkedIn, and American Express. Four months after the program ends, 85% of participants are employed at jobs that pays an average of $15 per hour, Bohen says. One year after the program's completion, the stats are about the same.

By participating in the Grads of Life campaign, nonprofits like Year Up get a chance to spread the word on a growing problem. That's certainly an admirable goal. The campaign "has put [its] finger on a real source of concern,” says Gary Burtless, a senior fellow at the Brookings Institution who researches labor market policy and unemployment. "But I'm not sure whether the best way to work on it is to round up employers [to fix the problem]."

It might work, he says, if something like 35% of the business community participates, including highly regarded companies. (The Grads of Life campaign says that The Gap, JPMorgan Chase, and Salesforce.com have created their own programs for hiring non-traditional candidates.) After all, that's how employer-sponsored health insurance spread. A few big companies implemented it as a way to get around the government's wage controls during World War II and it slowly trickled down to smaller businesses, becoming a standard benefit by the 1960s.

But Burtless is skeptical that non-traditional job training and hiring practices will catch on in a similar way because the United States, historically, has turned away from such programs. In the past, the U.S. relied on apprenticeships as a substitute path to employment for students who didn't flourish in typical education settings. But instead of spreading to white collar professions, apprenticeships "remained little islands of the economy in the construction and building trades," Burtless says. Institutions that offered worker training back in the 19th century, like what's now known as the Rochester Institute of Technology, eventually started offering four-year degrees. "They realized they weren't going to survive if they didn't call themselves colleges," Burtless says. The U.S. is now a nation that's "very suspicious of routes that don't end with a diploma."

It's not that way in other countries. Burtless pointed to apprentice systems in Germany, Austria, and Denmark that are mainstream, but that's largely thanks to post-World War II education system overhauls.

Government intervention at the federal level would go a long way toward getting such a system to stick in the United States, but because state and local governments directly oversee school systems, "our national government is very reluctant to intervene," Burtless says. And, as the Grads of Life program points out, that's to the detriment of young Americans who don't have access to--or don't succeed in--the traditional education system. "We don't do very well by those kids," Burtless says, "They need to make a living too."

]]>http://fortune.com/2014/09/24/youth-unemployment/feed/0young job applicant job interviewclairezillmanEurozone jobless rate stuck at 11.6% in Mayhttp://fortune.com/2014/07/01/eurozone-jobless-rate-stuck-at-11-6-in-may/
http://fortune.com/2014/07/01/eurozone-jobless-rate-stuck-at-11-6-in-may/#commentsTue, 01 Jul 2014 10:53:20 +0000http://fortune.com/?p=734632]]>The number of unemployed in the 18-country eurozone inched down by 28,000 in seasonally-adjusted terms in May, but the jobless rate stayed stuck at 11.6%, the E.U.’s statistics agency Eurostat said Tueday.

The figures show that the gradual decline in jobless that has accompanied the end of the eurozone recession effectively stopped in a month when both France and Germany, the two largest economies in the region, posted an increase in joblessness. The jobless rate peaked at 12% last May.

Germany’s economy is suffering a dip in confidence due to uncertainty over the Ukraine crisis, while France’s is struggling with longer-term obstacles to growth and job creation.

The German Federal Labor Office confirmed Tuesday that the disappointing trend on the labor market continued in June, with the jobless total rising by 9,000 in seasonally-adjusted terms to 2.916 million. The rise in Germany is also a mirror-image of the positive surprises registered in the winter, when a milder-than-usual winter led to construction employment falling less than it normally does, agencies quoted the Office’s head, Frank-Juergen Wiese, as saying.

Eurostat’s figures showed the young continuing to suffer disproportionately from the region’s inability to create jobs. The seasonally-adjusted jobless rate for those under 25 was 23.3%, down fractionally from 23.4% in May. The youth unemployment rate in Italy is now 43.0%, down 0.2% from May but up from 38.7% a year earlier. In Spain, the rate is even higher at 54.0%

Spain, which is the eurozone’s fourth-biggest economy, is at least growing, and businesses are starting to hire. Research firm Markit’s Purchasing Managers Index for June hit a seven-year high of 54.6, up from 52.9 in May. New orders to manufacturers are rising faster than at any time since 2007 and firms are also hiring staff at the fastest rate since the crisis, Markit said.

However, for the eurozone overall, Markit revised its initial estimate of manufacturing activity in June slightly downwards, to an index level of 51.8 from an original 51.9. That is consistent with weak growth–an index level of 50 reflects expansion.

]]>http://fortune.com/2014/07/01/eurozone-jobless-rate-stuck-at-11-6-in-may/feed/0Eurozone joblessgeoffreytsmithWhy the U.S. prison system hurts young workershttp://fortune.com/2014/06/12/why-the-u-s-prison-system-hurts-young-workers/
http://fortune.com/2014/06/12/why-the-u-s-prison-system-hurts-young-workers/#commentsThu, 12 Jun 2014 19:09:23 +0000http://fortune.com/?p=695473]]>It's a fact that seems almost too mind-boggling to be true: The U.S. has 5% of the world's population, and 25% of the world's prison population. In 2011, 716 out of every 100,000 American citizens were behind bars. Prisons are overcrowded, recidivism rates are high, and there are inadequate efforts to help ex-convicts, most of whom find themselves ill-equipped to meet the demands of the U.S. workforce - if they're lucky enough to find work at all.

Our nation's incarceration policies are in need of serious reform, and millennials need to drive the change. After all, young people, in particular, have a stake in the future of incarceration. The costs of the nation's arcane and outdated incarceration policies have created two central burdens: First, there is a human cost of incarcerating a large and disproportionately underprivileged portion of the population. Men and women who committed nonviolent offenses and who otherwise could have a positive impact on society are instead in prison.

We must reduce mandatory minimums for certain non-violent crimes, particularly drug offenses. This would reduce the prison population and incarceration costs to state and federal government, since nonviolent offenders comprise more than 60% of America's 2.4 million prisoners.

Similarly, states should be incentivized to adopt improved standards on prison education, parental training, work-study, and vocational training to equip inmates with the skills and educational opportunities necessary for successful reintegration, making recidivism less likely. According to one study, six months of education among federal prisoners was associated with a 17.5% decrease in recidivism.

State governments should also experiment with capitated payment plans for prisons to disincentivize prison companies from keeping inmates past their scheduled release date. Many large for-profit prison companies require "lockup quotas;" companies like the Corrections Corporation of America that contract with states often receive guarantees that their institutions will be filled at 90% capacity or higher. This quota creates perverse incentives for state governments and their police forces.

Finally, understanding that more than half of the prison population struggles with mental illness, it is essential to expand care to stabilize and rehabilitate inmates. The Senate Judiciary Committee and several high profile senators like Sheldon Whitehouse and Rand Paul recently introduced high-profile bipartisan incarceration bills. The proposals boast bipartisan support, and both the Senate and the House must maintain momentum to see them translate into action.

Indeed, precedent involving similar policy initiatives already exists at the state level. Reforms to this effect have received support from both sides of the aisle already: 19 Republicans and nine Democratic governors or state legislatures have reformed their criminal justice system to de-emphasize jail time for nonviolent offenders and emphasize rehabilitation and reintegration.

The bipartisan momentum is there. It's time for Congress to follow through on its potential.

Ryann Roberts, a recent graduate of George Washington University’s M.P.H program, is the Director of Policy for Common Sense Action, a bipartisan millennial grassroots group focused on advancing generational fairness, investing in millennial economic mobility and repairing politics. CSA has 24 chapters across 15 U.S. states. Elizabeth English, a recent graduate of the University of Michigan, is the former chapter president of the University of Michigan’s CSA chapter.

]]>http://fortune.com/2014/06/12/why-the-u-s-prison-system-hurts-young-workers/feed/0inmates prisonnt2192How to fix youth unemployment? Pay your internshttp://fortune.com/2014/06/11/how-to-fix-youth-unemployment-pay-your-interns/
http://fortune.com/2014/06/11/how-to-fix-youth-unemployment-pay-your-interns/#commentsWed, 11 Jun 2014 19:03:33 +0000http://fortune.com/?p=639147]]>Around this time of year, a number of our friends are celebrating their graduations from both high school and college. Yet for far too many, the transition from student life to the working world is filled with uncertainty. High unemployment and underemployment mean less opportunity for more members of our generation. And as rising income inequality and a recovering economy loom large, the availability of good jobs are crucial for young Americans to achieve economic security.

So why are more young people unemployed or underemployed? Though a slow recovery and a natural discrepancy between youth and overall employment are partially to blame, our education system is responsible as well. Student loan debt and tuition costs continue to rise, saddling young people with a heavy burden in a dismal job market. Meanwhile, many students take out loans and don't complete their degree.

While it is clear that we need reforms to ease student debt, lower tuition costs, as well as improve degree completion rates, it is equally evident that young people need more options to help transition from school to the working world. A four-year college is a terrific option for many students, but it's not the only way - vocational schools and two-year colleges can equip many students with the right skills for today's job market, and it's likely to cost a lot less.

One option is to expand vocational programs in high schools so that schools graduate students who are both college and career ready. Federal funding for vocational training has decreased from $12 million in 2002 to just over $7 million in 2011, according to the Department of Education. That is why we need state and local governments to help expand vocational programs that serve as a career bedrock for young Americans. This is not to discourage four-year degrees - indeed, college remains vitally important to economic mobility, but we must also ensure there's a range of options.

Furthermore, Congress should streamline overlapping federal workforce development programs. Currently, there are 47 — nearly all of which, 44, are overlapping, according to a report by the Government Accountability Office. As government commits to expanding vocational programs, it must also maximize the efficiency of existing programs because overlap leads to wasted resources and bureaucratic confusion.

Finally, colleges, universities and the federal government must work together to reduce the financial burden of unpaid internships and ultimately seek to eliminate them altogether. These, too, limit opportunity for students, particularly low- and middle-income students, because for many, unpaid internships are unattainable. Too often this leads to unfortunate self-selection; indeed, many of our classmates and our friends refused unpaid internships in Washington because they couldn't afford to spend a summer in the nation's capital without financial support. This only perpetuates a cycle of privilege and wealth.

What's more, paid interns are more likely to find jobs later. According to the National Association of Colleges and Employers (NACE), 63.1% of paid interns in 2013 landed a job compared to 37% of unpaid interns. Unpaid interns were only 2% more likely than non-interns to get job offers. Part of the transition from unpaid internships to paid ones involves imbuing those positions with more value for both the employer and the intern. Through more affordable and more valuable internships, more young people will be better trained for jobs.

Though we come from different political backgrounds, we must together engage our communities on an intergenerational level and create bipartisan political space for our representatives to act, so that the problems of today do not become the problems of tomorrow.

The millennial generation and America's young will bear the brunt of inaction, even though currently millennials have the least say at the policymaking table. It's time for that to change — Congress must act now on these crucial issues.

Andrew Kaplan, a rising senior at Brown University and New York City native, is co-founder and Chief Action Officer of Common Sense Action, a bipartisan millennial group focused on advancing generational fairness, investing in millennial economic mobility and repairing politics. CSA has 24 chapters across 15 U.S. states. Maddie Gootman, a rising senior at Vanderbilt University and South Carolina native, is the president of the Vanderbilt University chapter of CSA.